American and US Airways close merger

Washington DC
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American Airlines and US Airways closed their merger today, nearly 10 tumultuous months since they announced their plan to create the world’s largest carrier.

The creation of American Airlines Group is the last major step in consolidation among the US mainline carriers, which began with the merger of Delta Air Lines and Northwest Airlines in 2008. The deal leaves just four carriers – American, Delta, Southwest Airlines and United Airlines – carrying roughly 85% of all passenger traffic in the USA.

“We are taking the best of both US Airways and American Airlines to create a formidable competitor, better positioned to deliver for all of our stakeholders,” says Doug Parker, chief executive of Fort Worth, Texas-based American and widely seen as the mastermind of the deal, in a statement. “We look forward to integrating our companies quickly and efficiently so the significant benefits of the merger can be realised.”

The first sign of the merger for passengers will be reciprocal frequent flier benefits, which begin on 7 January 2014.

American and US Airways plan to begin codesharing in February 2014, with all flights carrying an American flight number by the end of that month.

US Airways will enter the Oneworld alliance on 31 March 2014, a day after it exits the Star Alliance.

A single operating certificate is expected by the end of 2015, American president Scott Kirby told Flightglobal on 5 December.

Parker began pushing for the combination of American and US Airways as chairman and chief executive of the latter shortly after American filed for chapter 11 bankruptcy protection in November 2011. He secured support from American’s major labour unions in 2012 before signing a non-disclosure agreement to officially discuss a combination with American management that August. The deal was announced this past 14 February, Valentines Day.

The deal proved far from done.

The US Department of Justice (DOJ) unexpectedly challenged the merger on 13 August, with assistant attorney general in charge of the agency’s antitrust division Bill Baer saying: “We think the right solution here is a full-stop injunction.”

The airlines and the Justice department reached a settlement that included the divestiture of 52 slot pairs at Ronald Reagan Washington National airport, 17 pairs at New York LaGuardia, as well as two gates and associated facilities at Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International and Miami International airports three months later.

A bankruptcy court judge approved the merger with the settlement on 27 November, paving the way to today’s closing.

American, which is listed under the ticket AAL on the Nasdaq stock exchange, operates nearly 6,700 flights to more than 330 destinations with more than 100,000 employees.